Also strong in December for the home furnishings specialty retailer were merchandise margins, which the company said "remained strong" due to less promotional and clearance pricing than last year.

Based on these improvements, Pier 1 Imports now expects merchandise margins to be at least 57.5% of sales for the fourth quarter, up from our previous expectation of 57.0% of sales.

"Looking forward to the spring and summer selling seasons, we are very confident in our new assortments which start to arrive in stores this week as the seasonal clearance event winds down," said Alex Smith, president and ceo.